Health insurance can pay you money if you become too ill to work. It can also help cover medical costs.
There are different types of health insurance, including
- mortgage payment protection insurance (MPPI)
- critical illness cover
- income protection insurance
- payment protection insurance
- private medical insurance.
When you are buying health insurance, it is important to know that insurers can arrange health insurance in two different ways:
Some insurers use this to help you get cover in the future for a health condition you are recovering from.
Types of insurance such as MPPI, other loan protection insurance and short-term income protection usually use moratorium underwriting. Some types of private medical insurance also use it.
Moratorium underwriting means the policy does not cover claims linked to health conditions you have, or have recently had, at the time you take out the policy.
This exclusion usually lasts for the first one or two years of the policy. This is called the moratorium period.
If a claim is made after the moratorium period, the health condition is covered as long as there are no more symptoms, medical advice or treatment (including taking medication) during the moratorium period.
Full medical underwriting
This is a process an insurer uses to work out how likely you are to make a claim on an insurance policy.
Income protection insurance and critical illness cover usually use full medical underwriting. Some types of private medical insurance also use it.
The insurer may ask for your full medical history. This includes information about your health, your lifestyle and the health of your close family members. They may do this through questions and medical reports.
Based on this assessment, they will decide whether to offer you cover, what premium to charge you and any other special terms or limits to include.
Health conditions that develop after you have taken out a policy don’t usually affect your premium or cover. But they may affect the terms you are offered if you wanted to switch to a different policy.